London close: Stocks finish lower as oil prices retreat

The FTSE 100 index dropped by 1%, closing at 8,273.32 points, while the FTSE 250 slipped 0.81% to finish at 20,986.15 points.

On the currency front, sterling was last up 0.28% on the dollar to trade at $1.3028, while it edged up 0.11% against the euro, changing hands at €1.1732.

“US stock indices such as the S&P 500 and Nasdaq 100 are taking a breather after their eight-day rally ahead of Wednesday's July FOMC minutes publication and the Jackson Hole symposium,” said IG senior technical analyst Axel Rudolph.

“A widely anticipated 25 basis point rate cut by the Swedish Riksbank to 3.5% and Canadian inflation falling to an over three-year low were not enough to keep US and European equity indices afloat, with the FTSE 100 giving back around a percentage point on Tuesday.”

Rudolph noted that the gold price hit a new record high above the $2,520 per ounce mark during the day, with the silver price also trading higher, albeit only at a one-month high.

“After two straight days of falling oil prices on demand concerns and hopes of an Israel-Hamas ceasefire agreement, buyers have crept back into the market around the June low amid growing uncertainty regarding that deal.”

Eurozone inflation unchanged in July, gold prices reach fresh high

In economic news, core inflation in the eurozone remained unchanged for the third consecutive month in July, according to final estimates from Eurostat.

The core harmonised index of consumer prices (HICP), which excludes volatile items such as food and energy, held at 2.9% year-on-year, consistent with preliminary data and the rates seen in May and June.

That figure marked the second-lowest reading for core inflation since February 2022.

On the month, core consumer prices fell by 0.2%.

Meanwhile, headline inflation, which includes all consumer goods, inched up to 2.6% year-on-year in July from 2.5% in June.

Prices remained flat month-on-month, following a 0.2% rise in June.

Elsewhere, eurozone construction output saw a significant recovery in June, growing by 1.7% after three months of contraction.

The increase was driven by gains in building construction - up 1.8% - and civil engineering - up 1.1%.

That rebound marked the strongest monthly growth since January 2023.

On an annual basis, output was 1.0% higher compared to June 2022, following a 2.1% decline in May.

Among member states, Portugal and France saw the highest growth in construction output, while Slovenia and Poland experienced the largest declines.

Germany meanwhile reported a slowdown in wholesale price deflation in July, with the producer price index falling by 0.8% year-on-year, down from a 1.6% drop in June.

That was the lowest deflation rate in 13 months, aligning with economists' forecasts.

In monetary policy, Sweden's Riksbank lowered its benchmark interest rate by 25 basis points to 3.5%, as expected.

The central bank noted that inflation was stabilising near its 2% target, with reduced risks of inflationary pressures rising again.

Finally, gold prices surged to a new record high on Tuesday, driven by expectations of US interest rate cuts in September and new import quotas issued by the People’s Bank of China.

Spot gold prices surpassed $2,525 per ounce, setting a fresh all-time high.

BT falls on Sky deal with CityFibre, Wood Group in the green

On London’s equity markets, BT Group tumbled 6.39% after CityFibre announced a significant long-term broadband partnership with Sky.

The deal would allow Sky to offer broadband services through CityFibre's full-fibre network, intensifying competition in the UK telecoms sector and weighing heavily on BT's shares.

Energy giants BP and Shell also saw notable declines, with BP down 2.76% and Shell slipping 2.84%.

The losses came as oil prices approached their lowest levels of the year, driven by hopes for a ceasefire in Gaza, which could alleviate some of the geopolitical risks supporting oil prices.

Housebuilder Redrow edged down 0.94% as it approached its merger with Barratt Developments.

The companies had decided to proceed with the merger without explicit approval from the competition regulator, receiving court approval for the deal.

As a result, Redrow was set to be delisted from the FTSE 250 on Thursday.

In the mining sector, Glencore and Rio Tinto reversed earlier gains, closing down 1.2% and 0.55%, respectively, amid a broader downturn in commodity prices.

Ocado Group shares continued their downward trend, falling 5.72%.

The stock had struggled recently amid ongoing selling pressure, exacerbated by concerns over the rollout of its robot-operated warehouses.

Despite a brief boost in July when the company raised its full-year profit margin targets, Ocado shares had now dropped 18% in the past four weeks and were down 50% year-on-year.

Among the risers, John Wood Group gained 1.43%, recovering from earlier losses despite reporting a swing to an operating loss in the first half of the year.

The engineering firm reaffirmed its outlook for this year and the next.

Precious metals miner Fresnillo rose 0.37% as gold prices reached a new all-time high, driven by expectations of US interest rate cuts in September and new import quotas from China.

Other miners in the sector were also in the green, with Endeavour Mining up 1.29%, Hochschild Mining ahead 0.55%, and Centamin rising 0.4%.

In broker note action, Serco Group added 0.35% after RBC Capital Markets reiterated its 'outperform' rating, highlighting the public services provider's strong execution and growth prospects.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,273.32 -1.00%
FTSE 250 (MCX) 20,986.15 -0.81%
techMARK (TASX) 4,865.96 -0.96%

FTSE 100 - Risers

Taylor Wimpey (TW.) 164.45p 2.48%
Glencore (GLEN) 410.20p 1.57%
Rightmove (RMV) 539.80p 1.47%
International Consolidated Airlines Group SA (CDI) (IAG) 173.70p 0.90%
Scottish Mortgage Inv Trust (SMT) 863.00p 0.89%
Sage Group (SGE) 1,024.00p 0.84%
3i Group (III) 3,217.00p 0.81%
Haleon (HLN) 372.40p 0.76%
Rio Tinto (RIO) 4,777.00p 0.74%
Smith (DS) (SMDS) 470.20p 0.64%

FTSE 100 - Fallers

BT Group (BT.A) 135.90p -6.39%
JD Sports Fashion (JD.) 122.95p -4.38%
Shell (SHEL) 2,733.00p -2.84%
Spirax Group (SPX) 7,355.00p -2.84%
BP (BP.) 429.85p -2.76%
SEGRO (SGRO) 873.40p -2.52%
Ashtead Group (AHT) 5,166.00p -2.49%
Frasers Group (FRAS) 842.50p -2.38%
Airtel Africa (AAF) 110.60p -2.21%
Vodafone Group (VOD) 74.00p -2.15%

FTSE 250 - Risers

Endeavour Mining (EDV) 1,650.00p 3.77%
Redrow (RDW) 787.50p 3.55%
Baillie Gifford Japan Trust (BGFD) 748.00p 3.31%
Hochschild Mining (HOC) 183.40p 3.02%
St James's Place (STJ) 698.50p 1.88%
W.A.G Payment Solutions (WPS) 66.20p 1.85%
Safestore Holdings (SAFE) 855.50p 1.55%
Kainos Group (KNOS) 1,086.00p 1.50%
Wood Group (John) (WG.) 133.90p 1.43%
Bytes Technology Group (BYIT) 483.20p 1.30%

FTSE 250 - Fallers

Ocado Group (OCDO) 360.10p -5.99%
Future (FUTR) 1,080.00p -3.95%
Diversified Energy Company (DEC) 1,006.00p -3.68%
Keller Group (KLR) 1,558.00p -3.47%
Rathbones Group (RAT) 1,832.00p -3.29%
PZ Cussons (PZC) 101.40p -3.06%
Close Brothers Group (CBG) 477.20p -3.05%
PureTech Health (PRTC) 166.80p -3.02%
GCP Infrastructure Investments Ltd (GCP) 78.80p -2.84%
XPS Pensions Group (XPS) 313.00p -2.81%